(NEXSTAR) – It’s long been known that living in big cities can be very expensive, especially in California. If you’re planning to move to one of the larger cities in the state, you’ll need to make sure your salary can cover it.
Renters in the nation’s largest cities pay an average of $1,759 per month, according to Realtor.com’s September Rental Report. That’s down about $20 from July and a little cheaper than the average room in California’s population centers.
Although rates are falling, rents remain high in some California cities, adding to the pressures already being felt thanks to inflation.
The Department of Housing and Urban Development, as well as many financial advisers, recommend following a financial plan in which your rent-to-income ratio is less than 30%. This means that if you earn $100 per month, only about $33 should be spent on your housing costs.
Using this ratio, fintech firm SmartAsset calculated how much renters living in the nation’s 25 largest cities need to earn to afford one-bedroom and two-bedroom apartments on average.
To determine the average annual income needed to pay the median rent rates of the two apartment sizes, SmartAsset used a rent-to-income ratio of 28%, slightly below HUD’s recommendation to leave more room in the apartment. sample budget. Cities were then ranked by how much renters would need to earn to afford an average two-bedroom apartment.
Not surprisingly, SmartAsset found that cities in California require renters to be among the highest income levels to afford apartments. In San Francisco, Los Angeles, and San Jose, where the rent for one or both of the apartment options examined was over $3,000 per month, renters would need to earn six-figure incomes to match the 28% ratio. .
The four California cities that made SmartAsset’s list all landed in the top 10 most expensive cities, with the average rent for each falling between $2,300 and $2,900 for those cities.
Here’s how these cities included in SmartAsset’s report ranked:
General classification | Town | Income for 1 room | Revenue for 2 bedrooms |
---|---|---|---|
1 | San Francisco | $125,200 | $170,961 |
3 | Los Angeles | $99,018 | $132,882 |
6 | San Jose | $107,771 | $129,932 |
seven | San Diego | $99,711 | $128,264 |
Other cities in the top 10 were New York, Boston, the District of Columbia, Seattle, Denver and Chicago. Among the most affordable cities, one in four renters could afford average apartments with an income below $50,000, according to SmartAsset. These cities are Columbus, Ohio; Indianapolis; Detroit; and El Paso, TX.
A recent report from Rent.com revealed that rent in a number of California cities has, unsurprisingly, increased since last year.